VegaX 2021 “Top 5” Predictions for Digital Assets 🎯
As we continue into 2021, VegaX shares its top five predictions for the digital assets industry, highlighting key trends that investors should be aware of throughout the year. Cheers to 2021 and here’s to a year full of gains! For more information on how to enhance your returns, register at: VegaX.com
#1 Bitcoin hits $50,000 by the end of the year 🚀
The supply dynamics will contribute significantly to the growth in price as only ~900 coins are being mined on a daily basis compared to double that in 2017.
The central banks and governments are unable to stop their stimulus policies which effectively create massive inflation effects as an aftermath of COVID19. All of these stimulus policies which are being supported primarily through the minting of new fiat money is not supported by economic growth, but rather a backstop for the immediate economic slowdown caused by COVID19. Even while we do see an over elation in the market, the need for an effective hedge in a hyperinflationary environment is inevitable.
We are already seeing various financial institutions purchase Bitcoin for their own account as well as on behalf of their clients:
#2 Ethereum approaches $2,000 within 2021 📈
Ethereum has just pierced its all-time high of approximately $1,400 in the first few weeks of 2021.
Cameron Winklevoss, co-founder of Gemini and billionaire BTC investor, says that Ethereum is the most underpriced cryptocurrency at the moment and is positive about its growth in the long term. Even more so because Eth2 has launched and would allow DeFi to grow faster if Ethereum becomes cheaper to use through Eth2.
In addition, many experts also argue that ETH’s blockchain technology is more suitable for usage than BTC. A report released by Electric Capital states that “more than 300 new developers per month are joining Ethereum.”
Especially after the Chicago Mercantile Exchange (CME) announced that it will launch Ethereum futures in 2021, the ETH price has been steadily increasing.
#3 Additional Regulatory Turmoil Due to Lack of Clarity and Lawsuits Creating Major Changes in the Top 20 Protocols by Market Capitalization ⛔
Ripple is being sued by the US Securities and Exchange Commission (SEC) with an unregistered securities lawsuit, regarding whether the early distribution of pre-minded XRP constitutes as a securities offering and if XRP stock should have been registered accordingly.
With one of the major cryptocurrencies having been sued by the SEC and now undergoing delisting on numerous exchanges, the future of various other projects is also now under question. While it can be viewed that XRP engaged in many flagrant activities to cause it to be construed as a security, there are also jurisdictions such as Japan, that have deemed XRP not to be a security.
Additionally, new leadership for the SEC has been recently determined to be Gary Gensler, a former regulator and Goldman Sachs banker. While it is still unclear what stance he will have on the cryptocurrency industry, as interest continues to grow and the purchases of cryptocurrencies by financial institutions continues to increase, there will be heightened interest on how to ramp up investor protections.
#4 Consolidation within the Global Cryptocurrency Industry 🌐
There is sentiment amongst deal sponsors that crypto exchange consolidation is coming, because according to Dushyant Shahrawat, a director of FinTech Investment Banking, “There is greater appetite for acquisitions, which is matched by an ability to pay for assets.” Binance leads the way with its purchase of leading data provider CoinMarketCap, and Gojek’s $72 million stake in Coins.ph.
The cryptocurrency industry is still extremely fragmented and presents numerous opportunities for efficiency through horizontal and vertical integrations. Furthermore, as more traditional financial firms enter into the space, we can expect to see additional acquisitions occurring across the spectrum.
#5 Inclusion of Digital Asset Investment Products into Traditional Asset Management Portfolios ✅💰
A number of high profile investors such as Paul Tudor Jones, Bill Miller and Stanely Druckenmiller have added bitcoin to their portfolios and have revealed their positive outlook for long term investment in bitcoin and it’s ability as a safe haven asset.
Likewise, funds such as J.P Morgan, Citibank and Guggenheim see bitcoin living up to its reputation as “digital gold” and the new preferred “alternative currency”.
Inclusion of digital assets in traditional portfolios can boost unique higher risk-adjusted returns and enhance diversity. We are already seeing the purchase of Bitcoin in funds that are geared for a more traditional investment audience and we will only see a continuing trend in the inclusion of Bitcoin into more traditional investment portfolios.